The insurer's coverage action was dismissed by the federal court in favor of the pending case in state court. Southern-Owners Ins. Co. v Marquez, 2021 U.S. Dist. LEXIS 108125 (S.D. Fla. May 4, 2021).
The underlying lawsuit was filed because of of an incident involving a golf cart on a sidewalk owned by the AOAO. The Marquezes owned the golf cart that injured the Murphy's child.
Southern-Owners issued a CGL policy to the AOAO. The Marquezes submitted a claim to Souther-Owners for coverage in the underlying lawsuit as additional insureds under the policy. Southern-Owners defended the AOAO and the Marquezes in the underlying lawsuit pursuant to a reservation of rights. The underlying complaint alleged that the Marquezes negligently permitted their daughter to operate the golf cart on the AOAO's pedestrian walkway. Further, the AOAO negligently failed to reasonably maintain the premises.
Southern-Owners filed suit for a declaratory judgment in federal court, arguing there was no coverage for the Marquezes under the policy. Members of the AOAO were additional insureds "only with respect to liability arising out of the ownership, maintenance, or repair of that portion of the premises which is not reserved for that member's exclusive use or occupancy." Southern-Owners argued that the Marquezes' liability in the underlying suit arose out of their ownership of the golf cart.
Southern-Owners also filed a motion to intervene and a motion to stay in the underlying lawsuit. The motion to intervene was granted, but the motion for stay was denied. The Marquezes then filed a counterclaim against Southern-Owners seeking a declaration that the AOAO's policy afford coverage for the underlying a]lawsuit,
In the federal case, the Marquezes filed a third party complaint against the AOAO, seeking a declaration that the AOAO failed to obtain a policy of insurance for coverage of incidents arising out the use of the common areas. The AOAO moved to dismiss the third party complaint. The court also requested briefing on whether it should retain jurisdiction of this declaratory judgment action.
In regards to the third party complaint, the court found that this matter and the underlying lawsuit were parallel. The parties were sufficiently similar. A judgment in the federal declaratory action would not settle the controversy or serve a useful purpose in clarifying the legal relations at issue. Moreover, the underlying factual issues were important, and could bear on the federal court's interpretation of the documents. The state court was in a better position to address the factual issues. Accordingly, the court declined to exercise jurisdiction and dismissed the operative complaints without prejudice.
